Reforms bring real estate into Australia's anti-money laundering regime for the first time
Anti-money laundering and counter-terrorism financing (AML/CTF) laws take effect from tomorrow, 1 July, bringing the property sector into Australia's existing regulatory regime and introducing new obligations for real estate agents and their clients.
According to the Real Estate Institute of Australia (REIA), agents will be required to take reasonable steps to identify and verify customers from the commencement date.
REIA chief executive Scott Rollason noted that in some circumstances, "agents may also need to ask additional questions about the source of funds or source of wealth, as well as the nature of the transaction. These are now standard legal requirements across the industry".
Under the new rules, buyers and sellers may be asked to provide identification such as a driver licence or passport, confirm personal and contact details, supply additional documentation where required, and answer questions about the source of funds or the nature of the transaction.
"For example, a buyer may be asked how funds for a property purchase were obtained — whether through salary, savings, investments, gifts or the sale of assets," Rollason (pictured right) said. "In some cases, agents may also need to understand a customer's broader source of wealth."
He added that the checks would apply regardless of prior dealings with an agent. "Even if you've bought or sold property before, or have an existing relationship with your agent, you can expect these processes to apply."
The REIA framed the reforms as a necessary measure against serious financial crime. "Money laundering is not a victimless crime," Rollason said. "It is often linked to serious criminal activity including drug trafficking, corruption, child exploitation and human trafficking.
"These reforms are designed to make it harder for criminals to use property transactions to hide or legitimise illicit funds, and to strengthen the integrity of Australia's economy."
On industry readiness, Rollason pointed to enrolment levels with financial intelligence agency AUSTRAC as evidence of strong preparation. "We are seeing very strong engagement from industry, including significant enrolment levels with AUSTRAC," he said. "Real estate is leading tranche two industries in participation, reflecting a high level of readiness across the sector."
The REIA also acknowledged the role of state and territory real estate institutes in preparing members. "They have played a critical role in ensuring the industry is informed, prepared and ready to meet its new obligations from day one," Rollason said.
The REIA said it would continue to support members through the implementation period and work with AUSTRAC on an ongoing basis.
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